Making Home Affordable Initiative

When this plan was announced by the Obama administration I was skeptical of its potential effectiveness to help people. While I still think the initial press release numbers of the plan helping as many as 7 to 9 million people is a bit over-zealous, I've changed my tune a little on the program as a whole.

We are now getting information on how this program is beginning to be implemented by lenders. If someone couldn't refinance to a better interest rate because they owed more than 80% of their home's current value, they may now have an option.

The programs are designed for more than borrowers of just single family residences. They can include rental properties, second homes, and multi-unit properties. In fact, one of these programs has better rates for an investment property than a conventional refinance loan!

The first step is determining if someone is eligible is determining who owns or guarantees their loan; Fannie Mae or Freddie Mac. They can determine this at a couple of loan look up tools here. I've been told that the Fannie Mae look up tool is a bit touchy and can return a false negative much easier than the Freddie Mac tool, so if both look up tools come back negative, I'd recommend calling the Fannie Mae phone number.

Unfortunately there are some loan types that don't yet qualify under these programs. These programs are designed for rate & term refinances only and can't be used to get cash back at closing. FHA is another great example. FHA already has a streamline refinance that doesn't require and appraisal so a program is already in place to aid in helping FHA borrowers refinance to lower rates.

Yesterday President Obama encouraged people to take advantage of the near record low interest rates to refinance if they could. I'd echo his sentiment. Please contact me if you or your clients have any questions on the new Making Home Affordable program.